Abstract

A review of the literature on the issue of labor market participation and occupational choice, allows us to see that research on this topic turned more on developed countries. In developing countries, including Algeria, the determinants of participation in economic activity and individuals’ occupational choice remain understood despite their economic and social importance since the degree of economic vulnerability and social development is strongly correlated to the occupied job. This work is not concerned with income from the labor market but rather the process that takes place upstream, that is to say, the integration into the labor market. We will study the labor market functioning by analyzing the supply and demand of labor. So the first step is to analyze the participation determinants in economic activity and in a second stage to determine the role of individual characteristics, in particular human capital for the tenure choice. The aim of this work is to answer the following questions: • What are the factors that influence individual's participation in the labor market? Is there a difference between men and women? • What are the occupational choice determinants of an individual on the labor market? Are there the same factors for men and women? • What are the causes of failure in the labor market? To provide an answer to all our concerns, we have exploited the employment surveys conducted by the National Statistics Office (NSO) from Algerian households (employment surveys 1997 and 2007). For processing and data analysis, we applied several econometric techniques: models of discrete choice (binary logistic regression) and segmentation techniques. Four major findings emerged from this study: first, we note that women's participation in economic activity is following a logic quite different from that of men. For women, it is the education and training that determine the participation in the labor market. For men, it is rather the age that determines participation. The second result concerns the effect of the sex variable; the latter has very important effect in the first phase of participation in economic activity. In the second phase (being busy) the effect of this variable is less important. The third result indicates the human capital importance in the positioning in the various segments of the labor market and improving the job situation. The fourth result is dysfunction in the labor market due to the mismatch between characterized supply by a population increasingly educated and labor demand characterized by job creation increasingly unqualified.

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